Preeceville / Endeavour (Oil & Shale Gas)
The Company has an 80% interest in 31,999 gross acres of P=NG leases in the Preeceville/Endeavour region of east central Saskatchewan. It also has 138,000 acres of exploration permits in the region.
Western Warner acts as the operator of the Preeceville/Endeavor Property pursuant to a joint operating agreement between the Company and Western Warner dated November 14, 2002. The Western Warner Operating Agreement also provides for the joint purchase of Crown lands within an area of mutual interest by the Company and Western Warner. Western Warner is a related party to the Company due to the fact that Donald Benson, the Chairman, Chief Executive Officer and a director of the Company is also a director and officer of Western Warner.
The Company's initial activities in the area began in December 2002, when it completed a 14 kilometre seismic survey. The results of the initial seismic survey identified five distinct formations within the Preeceville/Endeavour Property.
In addition, 37 kilometres of seismic data was successfully acquired in December 2004, and initial analysis confirmed the structural trends mapped in the 4 southern townships are seen to extend into the 2 northern townships. Over 75 exploration locations have been identified, many of them deep exploratory oil and gas targets.
The company has potentially significant shale gas reserves that are not disclosed in its reserves report. Companies on adjacent lands, estimate the shale gas reserves could be in the trillions of cubic feet. To date no company has been able to unlock the shale gas from the formations.
Preeceville/Endeavour Property Map
View Photos of Recent Oil Slick Discoveries
In October 2007, the Company engaged the services of Petro-Find Geochem Ltd. as a consultant to undertake hydrocarbon soil gas surveys in its most northerly permit in Townships 40, Ranges 4 and 5 W2 on the Preeceville/Endeavour Property. During the course of sampling, the consultant discovered oil seeps. Laboratory analysis on the oil seeps confirmed the presence of oil in the samples received. All together, evidence of 34 seeps was been found on the Preeceville/Endeavour Property.
In the early summer of 2008, the Company drilled its initial two wells in Preeceville in search of oil. The first well showed some indications of the presence of oil during the drilling, an oil film and droplets of oil in the drilling fluid coming over the shaker were found, and some oil staining was seen on some samples that were taken. Furthermore, some samples had good porosity. However, due to the intersection of faults, the well deviated and the drilling tools became lodged in the hole and cannot be dislodged. As a result, the well was abandoned.
Drilling of the second well was completed and the Company discovered oil in two formations. The well reached the basement and the Company then drilled a further 15 metres of overhole to allow for production. Unfortunately, following the completion of the perforating and testing, it was determined that the well does not have any production capabilities.
When the Company first began exploring this region, it was searching for what is known as the ‘Prairie Evaporate Salt Collapse Edge’. Based on recently completed seismic, management of the Company now believes it has found the Prairie Evaporate Salt Collapse Edge on its original holdings and these six townships contain a salt cap, which is acting as a trap for oil and/or gas. Management also believes that with new drilling technology now available, the Company will be successful in unlocking reserves of natural gas that industry consultants have confirmed are in the region.
The Company, along with its joint venture partner, Western Warner, entered into a farm-in agreement whereby it secured an interest in seven townships of land in Endeavour, Saskatchewan. The farm-in agreement requires the company to conduct exploration work on the lands by August 2012. The farm-in agreement provides that anytime prior to August 2012, the farm-out company has the option to back-in on a 50-50 go forward basis with the Company, or allow the Company to retain a 100% interest in the land with the farm-out company earning a gross overriding royalty of 5%. If the farm-out company elects to back-in, they will pay the Company 50% of all funds the Company has expended to date.
The Company drilled a new exploration well near Endeavour, Saskatchewan at the end of 2010. On December 15 drilling activities commenced in Endeavour, Saskatchewan and the well was spud. On December 23, the Company announced the successful completion of drilling of its well in Endeavour. Shortly after the Company entered the Red River formation at around 890 metres, signs of oil began coming over the shaker. Over the course of the drilling of the next 100 metres, a dozen oil samples were retrieved and were sent to a major laboratory in Calgary, Alberta for further analysis. Logging was also completed shortly thereafter and the logs were interpreted and analyzed by the Company’s team of geologists. On December 29, 2010, the Company announced that the laboratory analysis of the samples taken from the drilling of the 4-11-35-4 W2 site in Endeavour, Saskatchewan had been completed and that all samples showed the presence of hydrocarbons. In addition, the well logs also suggested that hydrocarbons were present, along with very good dolomite porosity – as high as 21%. Given these results, four separate intervals were selected for perforating.
At the completion of perforating, the Company had collected in excess of 100 samples, which all were sent to the laboratory in Calgary for analysis. The lab findings were then sent to Petro-Find Geochem – the company that made the initial discovery of the oil seeps in the region in 2008 – to evaluate the BTEX concentrations. The analysis of 11 of the fluid samples were found to exhibit significantly high concentrations of benzene, indicative of oil accumulations.
According to Paul Lafleur, President of Petro-Find Geochem, “Analysis of 11 fluid samples exhibit significantly high concentrations of benzene indicative of oil accumulations.
“Of particular significance is swab PB26Z (combined swab for intervals 937-939.5, 927-930, 917-920.5) which shows a benzene level of 2.55 ppm plus significant concentrations of toluene, ethyl benzene, and xylene,” he added.”It is believed that the well penetrated either a new pool, or the edge of an oil pool in the Red River Formation. The abnormally high concentration of C8-C10 (2.8 ppm) in this sample supports this finding.”With respect to the area as a whole, the permit that Nordic acquired from an international energy company expires on August 12, 2012, and Nordic has fulfilled all of its requirements set forth in the permit. In August 2012, the Company will select the lands that it will retain under new leases from the Saskatchewan government.
In addition to this oil play at Endeavour, the Company also has a Colorado Shale Gas resource play there. Analysis of the four wells drilled by our predecessor has shown that Nordic has up to 11 Brillion Cubic Feet (BCF) of Shale Gas per section.
A major Canadian energy company has recently completed a test of shallow, shale gas in northern Alberta at a depth of 250 metres to 290 metres, utilizing horizontal drilling, which gives Nordic the confidence that this method should work at Endeavour.
Producing Properties
Exploration Properties
• Preeceville/Endeavour Property
• Peace River Arch / Talbot Lake Property
